Hong Kong’s Rising Office Rents

In the last few years, the rent of offices have increased in Hong Kong and Singapore. It was reported that this time the increase in Hong Kong is almost 3 times more than Singapore. This means that Hong Kong has world’s most expensive office spaces. It was also mentioned in the report that this gap in the rents has made Singapore more competitive as a business center. And the business owners will be attracted to move their headquarters to Singapore.


Hongkong Office
Hongkong Office

By the end of 2016, Hong Kong’s premium of office rental in contrast to Singapore has reached 195%. This increase was in US dollars after the inflation was adjusted. The reason behind the increase is the limited supply of offices in Hong Kong‘s central area. As far as Singapore is concerned, they have sufficient offices in the new district of Marina Bay.


This time the gap between the rents in Hong Kong and Singapore is higher than it was in 2010. The rent gap in 2010 was 189%, that period was post-financial crisis period. During the Sars outbreak in 2003, the gap was still narrow with 47%. Moreover, the rental movement difference is quite clear when compared for longer periods. At the end of 2016, the rent of Singapore’s Grade A offices was 13.4 % lower than in 2000. While the rents in Hong Kong was 81% higher at end of 2016 than 2000.


The office markets of Hong Kong have been used by the financial companies and several banks. Along with this, it was disturbed by the formation of programs like Shanghai-Hong Kong Stock Connect and Shenzhen-Hong Kong Stock Connect. The Shanghai-Hong Kong Stock Connect was introduced in 2015 while Shenzhen-Hong Kong was established in 2016. Furthermore, the Chinese market is important center for financial organizations and international banks.


In Singapore, the leasing environment is competitive. As a result of this, the developers have provided tempting terms for the lease in order to increase rental rate. In Greater Central, the recent Grade A offices are limited. This leads to the availability of offices in the Central district of business in Hong Kong difficult. However, the new offices will be developed outside its central market. On the other hand, there are plenty of offices available for rent in the central district of Singapore.


In simple words, it means that the rental premium of Hong Kong over Singapore will be maintained for short term. According to the Sigrid Zialcita, under the current circumstances, to some businesses, Singapore’s central district of business will have more value.




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